Viacom, Time Warner Cable Fight Over iPad App

Would you like to watch live television on your iPad? Time Warner Cable thinks it’s a great idea. Viacom isn’t quite as happy.

With the rising success of Netflix and Hulu (not to mention Google TV), the television is no longer the only way viewers catch up on episodes of their favorite shows. Cable providers, in an attempt to stay relevant (and profitable), are providing their customers with more ways to tune in. Comcast now allows customers to access OnDemand shows through their laptop. Time Warner Cable took it a step further last month, releasing an iPad app that allows subscribers to watch live television on their iPad (as long as they are within their home wifi network).

The main issue in this dispute is whether Time Warner already has the rights to distribute Viacom’s channels (including MTV and Comedy Central) through other devices under their existing carriage agreement with Viacom. Viacom complained that they were not consulted on the app and that Time Warner “blatantly grabbed the rights that their competitors have negotiated in good faith to obtain.”

Time Warner is seeking a declaratory judgment from the District Court for the Southern District of New York supporting Time Warner’s right (under its carriage agreement with Viacom) to stream live television over other devices. Time Warner, taking the role of subscriber advocate, argues that it has secured its customers the right “to view this programming in their homes, over our cable systems, without artificial limits on the screens they can use to do so,” according to their General Counsel/Executive Vice President Marc Lawrence-Apfelbaum.

As a massive cable conglomerate, Viacom is used to copyright lawsuits. Less than a year ago, Viacom lost a landmark copyright case in the same court against Google over alleged copyright violations concerning Youtube. (Viacom is currently appealing this decision.)

While this lawsuit may likely turn on the terms in the Time Warner-Viacom agreement, the case could just as easily set a precedent for these carriage agreements to be read broadly, allowing for cable providers to adapt quickly to new technologies. At the very least, attorneys for both television networks and cable providers may be reviewing their own carriage agreements to see how narrowly the providers’ rights are drafted.

A consumer may wonder why Viacom cares if he catches up on the latest episode of “Jersey Shore” on his television or his iPad. As one commentator pointed out, it is not much different than watching it on a television in the bedroom or the one in the living room. Who cares? But Viacom itself pointed out in its complaint that it had previously offered to provide these rights to Time Warner Cable, at a price. From Viacom’s standpoint, new outlets for television viewing provide additional opportunities to negotiate for more money. If the contract terms are not clear on this issue, the district court may have an opportunity to decide who the default beneficiary of emerging technologies is–the cable company or the network.